The BHBA’s California State Bar approved MANDATORY FEE ARBITRATION PROGRAM handles fee and cost disputes between lawyers and their clients, including claims of return of non-earned prepaid fees.
The Mandatory Fee Arbitration Program is conducted under the auspices of the State Bar. It is governed by Business and Professions Code Sections 6200-6206 (and not CCP Section 1289 et seq.) and is open to any client or attorney, within Los Angeles County, seeking to settle a fee dispute through either mediation or arbitration.
The Beverly Hills Bar Fee Arbitration Program can accept any Attorney-Client fee dispute if a substantial portion of the services were performed in Los Angeles County. It is not necessary for the attorney to be a member of the Beverly Hills Bar Association in order to participate in the Fee Arbitration Program. Attorneys or clients from other counties can file In Los Angeles County only if a substantial portion (at least fifty percent) of the case took place in the County, by virtue of the client’s location or the attorney’s office.
The BHBA program has qualified arbitrators with expertise in all areas of practice and makes every effort to assign appropriate arbitrators to respective hearings. While most hearings average three to four hours, complex litigation has been known to continue for up to three days. Should the hearing exceed four hours, the BHBA Rules of Procedure provide for payment to the arbitrators by parties to the arbitration.
The program consists of both mediation and arbitration. The filing fee includes four hours of free mediation by a trained mediator, should both parties agree to this; if the mediation goes beyond this time period, the mediator is allowed to charge their hourly rate. Many times a dispute can be settled in mediation; however, arbitration will be scheduled should this not occur.
Fee disputes under $15,000 are heard by one arbitrator while disputes over $15,000 are heard by a panel of three arbitrators – two attorney members and one non-attorney. If both parties agree, cases over $15,000 may be heard by one arbitrator.
Arbitrators are selected from a panel of experienced attorneys and non-attorneys who volunteer their time to help resolve fee disputes.
Certain requirements and restrictions apply to the actual filing of a case with the BHBA program.
Requirement: Before an attorney can sue a client for fees, the Business and Professions code requires that the attorney advise the client of his/her right to fee arbitration. This is done through use of the State Bar Approved Form, Rev. March, 2013 Notice of Client’s Right to Arbitrate. The use of this form is mandatory. Incorporation of the same or similar language contained in the form on independent stationary or in the body of a letter from the attorney to the client is NOT legally accepted as a substitute.
Restrictions: Under California law, the attorney cannot initiate the arbitration or compel the client to participate under the process. The only way an attorney can compel a client to arbitrate a fee dispute is if there is a provision (clause) in the fee agreement/retainer, to which all parties agree, that any fee disputes will be submitted to arbitration under Business and Professions Code Sections 6200 through 6206. However, this clause cannot indicate that the arbitration will be binding. Also, parties cannot agree that they will mediate a fee dispute, prior to the dispute over legal fees; the client and attorney can agree to mediation and/or binding arbitration only after the dispute arises.
What Forms Do I Need to Begin?
For more information about Fee Arbitration matters, please contact Elaine Glass, Fee Arbitration Administrator at (310) 601-2442 or feearb [at] bhba.org.